Establishing a foreign company in Italy can be a solution to improve the corporate structure of large companies and identify a model corporate deed for their business.
This article speak of:
- Incorporated company in Italy
- Opening of a secondary office in italy
- Company registration italy
- Expert in advising on Italian
- Top law firm italy
- Administrative and public law in Italy Law firm and lawyer
- Model professional corporation act
- Business Law Professional Corporation
After writing how to open a company and do business in Italy,I now tell you the things you can do with a foreign company in Italy:
- Reduce bureaucracy;
- Internationalise the activity of the Italian company;
- Create a legal provision abroad;
- Protect assets;
- Meeting the need for privacy and confidentiality.
A foreign company in Italy cannot be used to:
- reduce the tax burden of the corporate group;
- work in Italy and pay taxes abroad.
The right strategy for the proper functioning of foreign society in Italy.
The purpose of this brief guide is to identify a strategy, to avoid the fictitious location abroad of a company’s tax residence.
Precisely in order to avoid or prevent any error, it is advisable to develop a preventive strategy to identify the actual residence of the companies, before acquiring company shares abroad or thinking about the appointments of DIRECTORS or CEOS.
The list of questions to be answered in order to develop the right strategy and avoid fictitiously identifying the company’s residence abroad are as follows:
- When is it better to name shares in the acquisition of a foreign company to a Ltd in Italy? When it is necessary to issue invoices for services performed in Italy, for companies resident abroad.
- What are the financial relationships of a company that works both abroad and in Italy? It is necessary to know how to distinguish the income produced abroad from that produced in Italy.
- What is meant by foreign dressed company? The fictitious tax residence abroad of a company operating in Italy.
Globalisation has greatly changed the market, which is no longer localised but, indeed, global. However, the share of taxation to be paid for the income produced is local. Therefore, it is necessary to be able to identify in which state incomes are produced.
Ask for legal advice to set up a Srl or a foreign company in Italy
Fictitious location of companies abroad (foreign dressed)
It is not difficult to locate a company abroad and carry out, instead, the activity envisaged by the corporate purpose in Italy. The term foreign dressed refers to the fictitious location abroad of the tax residence of a company that, on the contrary, has done its business and pursues the corporate purpose in Italy. This can also happen accidentally when:
- the company is abroad but contracts with customers and suppliers are closed in Italy, either physically, by telephone or by email;
- the administrative activity of the company abroad is coordinated by Italy by its administrative bodies, including through emails, telephone calls, video calls.
In such cases, the company may not pay the tax return, VAT and other taxes payable in Italy. The company may also be sanctioned by the Italian tax administration.
When it is possible to set up companies abroad
Establishing companies abroad is not prohibited by law. There are cases in which it is possible to carry out activities in Italy, on behalf of companies that are tax resident abroad. But in case of tax assessment, the burden of proof lies with the company under control. In these cases you have to be sure of being able to:
- Prove that they have not worked in Italy on behalf of the foreign company;
- Prove that the foreign company has worked without the involvement of capital or assets from Italy;
- Invoice regularly in Italy any work done.
The last suggestion is the most important because, in a simple way, it makes it possible to avoid the phenomenon of corporate investment. The important thing is to identify the work performed in Italy on behalf of foreign companies and to pay income taxes and VAT according to the rules of Italian tax legislation.
How to declare the income produced in Italy on behalf of foreign companies
In these cases, it is sufficient to name the shares of the foreign company to a Srl in Italy and invoice the services carried out in Italy according to the points indicated above. All other work carried out abroad is invoiced by the foreign company, without any negative repercussions in Italy. Work done in Italy is taxed in Italy. Work done abroad is taxed by the foreign company. This type of taxation can also be achieved through a Srl already existing in Italy. Simply name the company registered in Italy the shares of the foreign company and regularly invoice the work done in Italy, on behalf of the foreign company.
Ask for legal advice to set up a Srl or a foreign company in Italy
